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The Importance of Size in Private Equity: Evidence from a Survey of Limited Partners

33 Pages Posted: 22 Feb 2014 Last revised: 5 Sep 2017

Marco Da Rin

Tilburg University, Department of Finance; Tilburg Law and Economics Center (TILEC); European Corporate Governance Institute (ECGI)

Ludovic Phalippou

University of Oxford - Said Business School; University of Oxford - Oxford-Man Institute of Quantitative Finance

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Date Written: July 2, 2016

Abstract

Using a comprehensive survey, we show that investors with a larger capital allocation to private equity are more specialized − measured by the degree to which the investor focuses on private equity rather than other classes of investments − and have a wider scope of due diligence and investment activities. Other investor characteristics (experience, type, location, compensation structure, number of funds under management) play no role. In particular, Endowments are not special according to the survey measures. These results are consistent with the changing LP-GP relationship in private equity as capital is increasingly concentrated in the hands of large investors.

Keywords: Institutional Investors; Limited Partners; Investor Heterogeneity; Due Diligence; Private Equity.

JEL Classification: G20, G22, G23, G24

Suggested Citation

Da Rin, Marco and Phalippou, Ludovic, The Importance of Size in Private Equity: Evidence from a Survey of Limited Partners (July 2, 2016). Journal of Financial Intermediation, Forthcoming; TILEC Discussion Paper. Available at SSRN: https://ssrn.com/abstract=2399373

Marco Da Rin (Contact Author)

Tilburg University, Department of Finance ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Ludovic Phalippou

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

University of Oxford - Oxford-Man Institute of Quantitative Finance ( email )

Eagle House
Walton Well Road
Oxford, Oxfordshire OX2 6ED
United Kingdom

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